Modelling the Demand for Heterogeneous Consumption Products. A Macroeconomic Stock-Flow Consistent Agent-Based Approach

Description

There is broad consensus on the fact qualitative differences between consumption goods matter when it comes to explaining economic development and trade. However, while various models deal with the production and the emergence of heterogeneous products via product innovation, macroeconomic models that include a demand side fit to deal with heterogeneous consumption goods are scarce. The aim of this paper is to fill this gap. We propose a macroeconomic stock-flow consistent agent-based model that provides that provides a demand function fit to deal with the existence of products that differ with regard to their complexity. Underlying assumptions of consumption behavior are drawn from the almost ideal demand system(Deaton and Muellbauer 1980) and its extension in Landesmann et al. 1997. We show for the special case of two heterogeneous consumption goods in a closed economy without technological change, that the proposed demand functions offers a number of desirable properties.

Period	08 Sept 2022
Event title	34th Annual EAEPE Conference, Neapel
Event type	Conference
Location	ItalyShow on map